QuickBooks 2011: The Missing Manual

Handling Bounced Checks

Bouncing one of your own checks is annoying and embarrassing. It can be expensive, too, since banks charge for each check you bounce (and, often, they craftily pay your larger checks before the smaller ones to rack up as many bounced-check charges as possible). Besides depositing more money to cover the shortfall and paying those bank fees, you have to tell people to re-deposit the checks that bounced or write new ones.

When someone pays your company with a rubber check, it’s just as annoying. In addition to the charges your bank might charge for re-depositing a bounced check, you have to do a few things to straighten out your records in QuickBooks when a customer’s check bounces, such as:

• Record a new transaction that removes the amount of the bounced check from your checking account, because the money never made it there.

• Record any charges that your bank levies on your account for your customer’s bounced check.

• Invoice the customer to recover the original payment, your bounced-check charges, and any additional charges you add for your trouble.

Setting Up QuickBooks to Handle Bounced Checks

Before you can re-invoice your customers, you first need to create items for bounced checks and their associated charges.

Bounced check reimbursement item

When a check you deposit bounces, you’ll see two transactions on your next bank statement: the original deposit and a second transaction that removes the amount when the check bounces. You have to create the same transactions ...